Let’s Shed Some Light on That Crash

Although 2020 has seen a host of small biotech companies’ valuations soar on the back of promising trial data for a COVID-19 vaccine or treatment, it’s easy to forget just how devastating negative results can be. Bring results of a failed clinical trial to the public‘s attention, and the stock gets dropped faster than you can say “primary endpoint.”

Case in point: Cassava Sciences (SAVA). The Austin, Texas-based company shed 74% of its value in Friday’s session following the release of disappointing results from a Phase 2 study evaluating Cassava’s lead investigational drug, PTI-125, in Alzheimer’s disease (AD).

The candidate failed to meet the primary endpoint, which was to produce a meaningful improvement in a number of AD biomarkers, when compared to the placebo.

Targeting an altered form of filamin A, a scaffolding protein present in the body, PTI-125 is a small molecule designed to reduce the protein’s effects. Present in the brains of AD patients, the extremely toxic form of the protein interferes with the normal function of neurons, thereby, causing neuroinflammation and neurodegeneration.

The company has noted that the high variability in biomarkers may have masked the drug’s effect, with it planning to further analyze the data.

Although Maxim’s Jason McCarthy notes there were positives to take away from the data, they are not enough to dissuade the analyst from changing his model for Cassava.

McCarthy said, “The data failed to meet the primary endpoint of significant improvement in AD biomarkers from baseline to Day 28 in treatment groups compared to placebo. A significant reduction in CSF levels, however, was noted in neuroinflammation biomarker IL1-beta, a secondary endpoint (p<0.035). Nonetheless, a miss is a miss and the path forward for PTI-125 is unclear.”